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                                    <h1>News</h1>
                                    <h3>Comparison sites starting to make waves in Asia</h3>
                                    <p>
                                        <em style="font-size: 0.8em; color: #666; line-height: 1.2em;">Source: Insurance Insight<br />
                                            Author: Nicky Burridge<br />
                                            Date: 14/02/2012<br />
                                            URL: http://www.insuranceinsight.eu/insurance-insight/feature/2152396/comparrison-sites-starting-waves-asia
                                        </em>
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                                    <p><b>
                                        Price comparison websites are a significant part of the financial landscape in the UK. 
                                        Nicky Burridge asks whether Asia will look the same in the future.</b></p>
                                    <p>Price comparison websites have become such a significant part of the financial landscape in the UK, 
                                    it is hard to imagine buying insurance without them. But in China and South East Asia the concept is still very much in its infancy. 
                                    The first aggregator site in the region was only set up in October 2010, when <b><a href="http://www.comparexpress.com" target="_blank">Comparexpress.com</a></b> launched in Singapore.</p>
                                    <p>The website, which offers motor, personal accident and travel cover, started with just three insurers, 
                                    but has since expanded to cover 11 brands, including an insurance agency.</p>
                                    <p>The group launched a second website in Thailand, branded <b><a href="../">GluayGluay.com</a></b>, in October last year, and has plans to roll out 
                                    aggregator sites in China, Hong Kong, Malaysia, Indonesia and the Philippines</p>
                                    <p>Meanwhile, Baowang (www.baoxian.com) is blazing the trail for price comparison websites in China.</p>
                                    
                                    <h4>CNinsure roll out</h4>
                                    <p>Backed by Nasdaq-listed insurance intermediary CNinsure, the site opened to business at the start of this year.</p>
                                    <p>Like <b>Comparexpress</b>, Baowang enables consumers to not only compare prices and policy features, but submit online 
                                    applications and payments - an entirely new proposition in the Chinese market</p>
                                    <p>The launch came after the China Insurance Regulatory Commission published a legal framework setting out rules for 
                                    insurance intermediaries to carry out business online. It is early days, but Chunlin Wang, chief executive of CNinsure, 
                                    is bullish about the site's prospects.</p>
                                    <p>He says: "With a favorable regulatory environment and being on the leading edge of the trend, we are optimistic about 
                                    the development of our e-commerce insurance business."</p>
                                    <p>However, some industry commentators are more sceptical that the price comparison model will work in China and 
                                    neighbouring markets, such as Hong Kong.</p>
                                    
                                    <h4>Savvy customers key to success</h4>
                                    <p>The success of aggregator websites ultimately rests on a combination of savvy consumers, who are willing to shop around 
                                    to get the best deal, and a highly competitive industry, in which insurers are prepared to undercut their rivals in order 
                                    to grow market share. But both of these factors are largely absent in China.</p>
                                    <p>The general insurance landscape is dominated by three major players: the People's Insurance Company of China, Ping An and 
                                    China Pacific, which between them account for around 67% of products sold.</p>
                                    <p>The rest of the market is highly fragmented and consists of smaller insurers, many of which operate in limited regional 
                                    areas, and foreign insurers, which make up just 1.1% of the market.</p>
                                    <p>But there is a more significant obstacle to the success of the sites. Sam Evans, partner at KPMG China, explains:</p>
                                    <p>"Following expected pricing reform, though, insurers will have greater flexibility to vary the premiums through 
                                    things like no claims discounts and other methods. Success comes through scale, rather than price and product features."</p>
                                    <p>China also appears to lack the sophisticated, price-sensitive consumers that aggregator sites rely on.</p>
                                    
                                    <h4>Traditional models rule</h4>
                                    <p>Evans says: "The distribution models are still very traditional here. The primary way most people buy insurance is through 
                                    an agent and increasingly through banks. Direct sales are still very rare.</p>
                                    <p>"The only product in China that has any traction at all in terms of telesales is motor insurance, and that is really coming 
                                    from only one company, Ping An."</p>
                                    <p>Research suggests that many Chinese consumers lack the confidence to pick their own products, but they trust an agent to 
                                    understand their needs and make recommendations based on their individual circumstances.</p>
                                    <p>The bancassurance channel is also popular because consumers trust the bank brand, while they like the physical presence 
                                    of branches. Meanwhile, the cost of cover is relatively low down the list of factors that influence Chinese 
                                    consumers' purchasing decisions.</p>
                                    <p>Research carried out by KPMG among 1220 people in China found that the single most important factor that influenced 
                                    consumers when buying insurance was a previous positive experience of a company. Next on the list was receiving personalised 
                                    advice, followed by being given a recommendation by a relative, with the cost of a product coming a lowly fourth.</p>
                                    
                                    <h4>Building relationships</h4>
                                    <p>Many agents also work hard to maintain long-term relationships with families. For example, in China's economic powerhouse 
                                    province of Guangdong, some agents have set up sidelines helping Chinese women desperate for a second child to give birth in 
                                    neighbouring Hong Kong, thus circumventing the country's one-child policy. They then use the relationship they establish to 
                                    sell insurance products to the family for years to come.</p>
                                    <p>The type of policies that work well on price comparison websites also have relatively low market penetration in China.</p>
                                    <p>Only 38% of the consumers questioned by KPMG had motor insurance, just 24% had a short-term travel insurance policy and 
                                    only 18% had property cover. These rates compare with 66% of people who had accident insurance and 55% who had critical illness cover.</p>
                                    <p>And even if consumers become more price sensitive and shop around for products, it is still likely to be a big leap for them to 
                                    take out cover online.</p>
                                    <p>Hong Kong insurance agency Now Insurance set up a website in 2002 and is now one of the top 10 agencies that provides insurance 
                                    online in the city. But group spokesman Terence Tse says: "The online service is mostly for information only. Most people like to 
                                    talk to someone personally, rather than take out insurance online.</p>
                                    <p>He adds that across the market in Hong Kong around 99% of motor insurance is still sold offline. But insurers are not blind to 
                                    the potential cost savings of doing more business online, and this is likely to prove a powerful motivator in trying to migrate 
                                    customers towards this channel. </p>
                                    <p>Some groups, such as Dah Sing Insurance and HSBC, are offering discounts of up to 20% to consumers in Hong Kong who take out 
                                    policies online, but many others still only offer paper applications. </p>
                                    
                                    <h4>Other aggregators in the pipeline</h4>
                                    <p>Meanwhile, there are signs that more aggregator sites could appear in the near future. A price comparison site for life 
                                    insurance is rumoured to be due to begin a pilot in Shanghai shortly, while insurer Ace, which lists on <b>Comparexpress</b>, 
                                    says it has received several approaches regarding websites in Hong Kong, although so far, nothing has materialised.</p>
                                    <p>The group adds that it believes the success of the aggregator model will be heavily dependent on the growth in online 
                                    direct purchasing. Shu-Yen Liu, actuarial practice leader for Asia at PwC, thinks there might be 
                                    scope for internet sales for motor insurance.</p>
                                    <p>But he adds: "I don't see price comparison happening for other products as consumer purchasing behaviour is key."</p>
                                    <p>Either way, there is clearly a long way to go before the sites become the popular consumer tools that they now are in the UK.</p>
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